### U.S. Stock Futures Decline Ahead of Key Retail Earnings Reports

U.S. stock index futures experienced a downturn on Tuesday, preparing for significant earnings releases from the retail sector. As of 05:50 ET (09:50 GMT), Dow Jones Futures decreased by 90 points, a 0.2% drop. Similarly, S&P 500 Futures fell 21 points, or 0.4%, and Nasdaq 100 Futures saw a decline of 100 points, or 0.5%.

Monday's trading session ended on a high note for Wall Street, with major indices bouncing back from an earlier dip sparked by Moody’s downgrade of credit ratings the previous week. The S&P 500 index achieved its sixth consecutive positive close, placing it just 3% below its all-time high.

Investor focus shifts to the retail sector, with Home Depot (NYSE: HD) slated to announce its latest earnings before the market opens. Insights from Home Depot's pricing strategy will be under careful review following Walmart's (NYSE: WMT) announcement of impending price hikes due to tariff-related cost pressures. Notably, former President Trump had urged Walmart to bear the tariff costs itself. Observers will also be keen to see how Home Depot and its competitor Lowe’s Companies (NYSE: LOW) foresee tariffs impacting consumer spending on home improvements, amid concerns that tariff-related uncertainties are dampening consumer sentiment.

Later in the day, attention will turn to homebuilder Toll Brothers (NYSE: TOL), which will release its quarterly earnings report after the market closes.

On the legislative front, a special House of Representatives committee endorsed a wide-ranging tax cut bill on Sunday, setting the stage for a potential vote this week. The bill, which has the backing of Trump, proposes extensive income tax reductions alongside increased spending on defense and immigration. However, critics caution that the bill could exacerbate the U.S. fiscal deficit, which is already at record highs, and has faced opposition from both moderates and less hardline Republicans.

In the international arena, anticipation builds for upcoming trade discussions between the U.S. and Japan, slated for later this week, as reported by Japan's Kyodo News agency. However, expectations for any substantial trade deals at the G7 finance ministers' meeting in Canada this week remain low, according to Reuters.

Tensions were further highlighted by China's Ministry of Commerce on Monday, as it accused the U.S. of undermining recent trade talks by issuing warnings against using Huawei chips. The U.S. Department of Commerce had previously claimed that Huawei's Ascend chips posed security risks and violated export restrictions. China has demanded that the U.S. correct these actions, citing a breach of agreements made during high-level talks.

Oil markets also felt the pressure, with Brent futures dipping by 0.1% to $65.49 per barrel, and U.S. West Texas Intermediate crude futures also slipping 0.1% to $62.11 per barrel. The slight decline comes amidst uncertainties surrounding a U.S.-Iran nuclear deal and potential negotiations for a Russia-Ukraine ceasefire. Iran's reaffirmation on Monday that its uranium enrichment program is non-negotiable continues to pose a challenge in nuclear discussions, with implications for global energy markets if sanctions are lifted.

Investors are closely monitoring these developments, staying cautious about adding more money into stocks amid high valuations and ongoing geopolitical tensions.